What is the concept of leapfrogging?
Leapfrogging is a phenomenon that has been observed in many developing nations. The path for the development of emerging economies is to follow in the footsteps of the already developed nations. It is a much shorter and faster process to become richer by following a like for like series of steps that allowed developed economies to prosper in the way they have. This is known as the “catch-up1 ” theory of development, by way of which the developing nations form a sequential process of investment in skills, production capacity, and design technologies that allow the nation to develop. The nation crosses off the traditional stages of development to jump directly to the latest technologies or explore an alternative path of technological development.
Although in the past, leapfrogging has been criticized by many, a 2017 World Bank study on development in Africa said that “Vertiginous changes brought about by the digital revolution in the past 20 years make leapfrogging not only a possibility but a necessity.” This is because leapfrogging would provide a much needed boost to a particular nation and give it a chance to move forward at a pace much faster than it normally would have if it were developing technology from scratch whereas it has neither enough funds to allocate for research and development and nor the required resources. In a similar manner, for middle-income countries, it helps to avoid the infamous middle-income trap by allowing such nations to rapidly move away from a knowledge-based economy built on digital services and high value-add production.
Leapfrogging as a boon
Leapfrogging can be effective if implemented in an efficient manner. For example, when M-Pesa
(a mobile phone-based money transfer service, payments, and micro- financing service) started in Kenya, in 2014, the central bank of Kenya imposed few restriction besides requiring users to register. This combined with the influx of cheap mobile devices, coupled with an increase in the demand for financial services helped mobile payment apps grow and spread rapidly throughout the entire country. Today eighty percent of Kenyans use mobile payment apps, which is a substantially huge figure when compared with a smeager twenty percent in the United States of America. A similar situation was observed in the country of Rwanda. In 2013, taking into consideration the serious lack of infrastructure, the government formed a partnership with Korea Telecom to deliver 4G service through a wholesale business model. This resulted in 95% coverage in just four years which would have, following the normal course of time, taken twenty years.
Leapfrogging as a bane
Contrary to the positive side, leapfrogging won’t lead to development until other measures are taken to support that particular product or technology. Policies, infrastructure, etc go hand in hand with development. If the Central Bank of Kenya had imposed a variety of restrictions then M-pesa would not be able to reach the unprecedented heights it has. However, it must be noted that there are certain elements of economic development that cannot be skipped even with the use of new technology. The nation needs to build infrastructure for health, education, roads, plumbing, social institutions with strong standing, etc. For example, solar energy is a renewable source of energy but it will not be sufficient to generate the power required to light
up whole industries and offices. It alone cannot lead to development, so there should be an alternate source of energy, taking into consideration, instances where there is an extended winter or monsoon leading to prolonged periods of less sunlight.
How to use leapfrogging efficiently
Leapfrogging can be a boon or a bane but use it as a boon if the efficiency is maximized. Maximization of energy can be done by the formation of mutual partnerships between the government and private sector so they can reach a much larger scale and have innovative ideas. For a country to develop, the development progress needs to start right at the grassroots level. Education plays a key role in development but the issue is that many of the schools run by the government are rarely well-equipped, while the teachers require better and more focused training. Another crucial factor is the financial system. The financial system in developing nations is neither properly organized nor well structured. Not everyone has basic financial knowledge while some are not even aware of safe investment options, which is another important factor contributing to the growth of the economy.
A step towards the future
The internet is seen as a set of technologies that might help developing countries to leapfrog. This helps the countries to develop or “catch up” faster. Benefits of the internet come from the ease of doing business with the help of it. It helps for internal control and for properly dealing with customers. Internet helps to connect India throughout the world and represent Indian products at a global level. This along with India’s liberalized trade provides business opportunities that would have gone to better-connected competitors. In India, internet usage isn’t very high because India lacks the infrastructure and has poor public investment as well which causes a big hurdle.
Leapfrogging is not a solution to all the developmental challenges that emerging economies face. It can have a transformative effect if it is combined with equally effective policies and those technologies which are needed by the people and not only introducing solutions for problems that don’t exist in the first place. Leapfrogging should try and make the current processes and resources used more efficiently than the way they are being utilized.
The need for a leapfrog strategy. The Need for a Leapfrog Strategy | Center for Strategic and International Studies. (2021, July 23). https://www.csis.org/analysis/need-leapfrog-strategy. Miller, R. (2001). Leapfrogging? India’s information technology industry and the internet.
Author: Arya Jogani
B.Sc. Economics, SVKM’s Narsee Monjee Institute of Management Studies (NMIMS)